Things that may happen in a merger.

[SparrowHawk]

Can we please not have this turn into yet another pilot senior discussion? There is a thread with over 4500 posts, mostly devoted to that topic: http://airlineforums.com/topic/49837-us-pilots-labor-discussion/page__st__38016

Look, it's not that those of us who are not pilots do not care. But I venture to surmise that we are very tired indeed of the subject.

Let's keep this one on what might happen in an AA/US combo --- on topics such as routes, equipment types, what might happen to the W/O express carriers, IT issue, etc.

There is a great of stuff on which to speculate; pretty, pretty, please: no pilot issues.


'kay?

Surely Shirley you jest as you know it will never happen! Nothing is more important then a pilot. Ask them they'll tell you. 4,500 pages worth, leaving no stone unturned from which to spew their venom and ego.

What better screen name then "Claxon" See below

Noun 1. claxon - a kind of loud horn formerly used on motor vehicle
klaxon horn - an alarm device that makes a loud warning sound

 

[Phoenix]

Surely Shirley you jest as you know it will never happen! Nothing is more important then a pilot. Ask them they'll tell you. 4,500 pages worth, leaving no stone unturned from which to spew their venom and ego.

What better screen name then "Claxon" See below

Noun 1. claxon - a kind of loud horn formerly used on motor vehicle
klaxon horn - an alarm device that makes a loud warning sound

And you have savored every post like it was hot off a Xerox. 😛

 

[zethya]

Nope, its DCA then CLT, so we were both wrong.

In an interview on Wednesday, US Airways President Scott Kirby listed, in order, the four most profitable major airline operations in the U.S. in terms of profit margin. They are Newark, Washington Reagan National, Houston, and Charlotte. Two are East Coast airports dominated by US Airways, while two are United (UAL) hubs. Kirby emphasized that US Airways could only estimate profit margins at other carrier's hubs, and said margins at US Airways hubs in Philadelphia and Phoenix are "in the middle of the pack."

Read more: http://www.minyanville.com/sectors/transportation/articles/thestreet-Delta-DAL-AMR-United-Airlines/3/23/2012/id/40062#ixzz1sdaoFJRJ

Profit Margin and overall profits are 2 very different things. PHL's O&D is almost 2x that of CLT. Parker/Kirby will NEVER publicly disclose for competetive reasons "how much money they make" at any Hub - just as AA, UA or DL would not. There is no proof that CLT's US European Routes are profitable. The seasonal routes (DUB, MAD, FCO, etc.) are primarily PHL reliever routes for connections. The only CLT-Europe route that is (publicly) known to be profitable on an annual (O&D) basis is LGW. Further, if US moves to One World (very likely), CLT may loose all of their European flights, including the heavily corporate supported LH Munich route. It may gain a LHR route and retain 2 or 3 seasonal carribean routes, but IMO that's about it. South America would probably be toast in favor of the much larger Latin America-MIA O&D. Domestically, CLT could become a large NE Corridor (JFK/PHL) reliever for West-East (North/South) traffic flows to secondary route cities. The bigger ? is what will be the relationship between PHL and slot restricted JFK.

 

[SparrowHawk]

And you have savored every post like it was hot off a Xerox. 😛

Be Quiet you!

 

[dash8roa]

I would like to see AA remain as a stand alone carrier. US would bring nothing to the merger,tiny wide body fleet,aged piedmont fleet,and phx,a low yield hub. The UA/CO and DL/NW mergers were mergers involving large carriers with large fleets and hubs. US is a niche carrier without much appeal to larger carriers. They were spurned by delta and united because of not bringing much of value to the table. Same situation today regarding AA. 🙁

 

[Phoenix]

I would like to see AA remain as a stand alone carrier. US would bring nothing to the merger,tiny wide body fleet,aged piedmont fleet,and phx,a low yield hub. The UA/CO and DL/NW mergers were mergers involving large carriers with large fleets and hubs. US is a niche carrier without much appeal to larger carriers. They were spurned by delta and united because of not bringing much of value to the table. Same situation today regarding AA. 🙁

The employees of USAir should be organizing a "Keep USAir, my USAir" campaign... because truthfully I suspect that DP plans to pay for all the promises he is making to AA unions by furloughing the USAir union members.

 

[robbedagain]

phoenix would that be similar as to what or how AA did TWA in? I suspect your right but hope your wrong on that. I dont even know if that would even be allowed

 

[BonTemps]

I have friends that work at both airlines in middle management-at US, middle managers are paid 20-40% LESS than at AA for most positions, even up to and including directors. Examples- US Shift Manager is about 35-40K, AA CSM (same job different title) is around 45-55K, -AA station manager of a place like TPA makes around 90K maybe more, US manager of same type of station is in the 70K range. AA Director upwards of 175K, US Director around 100K. Analysts-US 32K-55K..AA 45K-65K...How could a combined company pay for these raises? Or would the AA management be taken down to US Airways levels? I've also heard most AA management would be out, leaving US management to run the place. I can't see many management types sticking around for those kind of pay cuts. Which might be a good thing given the things I've heard about AA middle management......

 

[Mrs. McFly]

The employees of USAir should be organizing a "Keep USAir, my USAir" campaign... because truthfully I suspect that DP plans to pay for all the promises he is making to AA unions by furloughing the USAir union members.

You might be right...

http://aviationblog.dallasnews.com/archives/2012/04/how-a-us-airways-american-airl.html

 

[luvthe9]

The employees of USAir should be organizing a "Keep USAir, my USAir" campaign... because truthfully I suspect that DP plans to pay for all the promises he is making to AA unions by furloughing the USAir union members.

And he will probably get it, our new leadership is not only weak but stupid. The "peacemaker" is now making a deal for himself. Doug Mowery gave us LOA93, Bill Pollock gave away our pension, now Gary Hummel will sell out this pilot group. Some people will never learn.!!!!!!!! Gees Hummel can't even follow the bylaws and constitution.

 

[usjacket]

"And last but not least I hope they offer a very good buyout and we can once and for all get ride of the malcontents!"

Who knows...Maybe he will get rid of you and me too! 🙄

 

[nycbusdriver]

I would like to see AA remain as a stand alone carrier. US would bring nothing to the merger,tiny wide body fleet,aged piedmont fleet,and phx,a low yield hub. The UA/CO and DL/NW mergers were mergers involving large carriers with large fleets and hubs. US is a niche carrier without much appeal to larger carriers. They were spurned by delta and united because of not bringing much of value to the table. Same situation today regarding AA. 🙁

You may be right, but I had to snicker at your inclusion of the Dash 8 fleet...like it really matters in this deal. American is trying to get rid of Eagle for good reason. Do you really think those Dash 8's matter one whit?

 

[Move2CLT]

Gees Hummel can't even follow the bylaws and constitution.

LMAO!!

Did Cleary do that when he filed his lawsuit in NY?

Did Cleary do that when he flew out to meet Eric in DFW?

Etc, etc.

 

[Move2CLT]

More from the APA:


Hello everyone,


This is pretty long but I wanted to get as much detail as I could. I attended the DFW Domicile Meeting today and I have to say that I am impressed with what APA has put together here. I am going to try to condense 7 pages of notes into one coherent email but before I start I want to opine a bit. It is a given that labor does not like mergers/acquisitions/buyouts etc. so not only is this an unprecedented event in labor history with 3 major unions throwing their support to Doug Parker but it is the ultimate vote of no confidence in Tom Horton and his AMR management team.


As soon as Rusty made it clear that Parker and Scott Kirby would be bringing their management team to Centerport to run the new American Airlines the room erupted in applause. I would guess there were between 250 and 300 pilots there SRO and everyone was enthusiastic about this plan. So with that in mind I will run through my notes in no particular order.


This is not a done deal but the first step. What has to happen is that LCC (US Airways stock ticker) must convince the Unsecured Creditors Committee (UCC) that this plan is better than Horton’s. The UCC set this up when they agreed to allow Horton another 180 days of exclusivity that should a competing offer appear it is up to Horton to prove that his plan is the better of the two instead of the usual onus being put on the competing offer.


Before Russ went into detail on APA’s concerns with AMR’s business plan (the same cornerstone plan from 2009 with the added gouging of labor) he commented on a briefing that APA got from the DAL MEC who told the Board to Focus on the business plan. APA has come to the conclusion that Horton’s business plan is over optimistic and it fails to allow for any competitive response from DAL and UAL. While it paints a rosy picture out 3-5 years it doesn’t speak to the interim. He went on to talk about AMR’s inability to execute on anything and commented that 2 years ago APA approached management with a proposal to purchase JetBlue and management refused to act because no one wants to make a decision. The final comment here was that a flawed business plan and an inability to execute will put us right back here in a couple of years.


Expect Horton to fight back and don’t be surprised if he backs off his 1113 positions. APA’s position is that we are no longer interested in dealing with Horton regardless of what he offers because of the business plan.


At that point Russ brought out a cactus plant and reminded everyone that it is “bring a cactus to work day” which got another round of applause.


Russ gave us a timeline of how the deal went down. LCC presented their proposal to Lazard, Inc who is working with APA who then recommended that Bates meet with them. That in turn led to 11 days of negotiations which accomplished more than 5 years of negotiating with AMR. They came up with a basis for a contract. What will happen is that should this all be approved both sides will take 60 days to convert this into a TA that we can vote on.


So here it is (this will apply to all three groups, us, the east and the west)


6 yr contract.


Pay:

Pay bands but the A319 will be in the narrow body band.

5.5% pay increase DOS

3% yearly years 2-6

Parity with UAL/DAL by at the end of the contract


Vacation becomes 3:40 per day with increased accrual


Hard freeze on the A-Fund and a 14% DC plan of some sort


Scheduling:

MALV (max avg line value) 83 hours

Pick up to 90

Keep duty rigs E-F-G time


Scope:

110% of the narrow body fleet up to 81 seats

Tail # specific and it will be 2 for 1 i.e. two 81 seat jets to the commuter operation nets one new jet to the mainline. Domestic code share would be limited to 4% total which would be equal to 25% of JetBlue’s operation.


Furlough protection for the most junior active pilot.


There will be fences but they are still to be negotiated.


Seniority:


Russ stated that the integration would be painful but then went on to say that McCaskill-Bond would apply and the retirement demographics would be favorable to us. (I guess the US Air guys are older than us)


In closing his presentation Russ said that APA was optimistic that this was doable and that the LCC plan was viable and good for everyone. By consolidating we help stabilize the industry, we elevate the lowest paid legacy pilots (East and West) to industry standard and we support both UAL and DAL in their negotiations.


At that point Dave Bates addressed the meeting for about 30 minutes. His high points:


Have an open mind and get informed. Said APA was about to start putting out lots of info. The APA BOD supports this unanimously 18-0. Parker and Kirby have a master plan with global vision and they can execute. Reiterated that AMR management does nothing and takes no risks while Parker and Co. wants to solve problems.


Said that there will be a new TTOT system as well as a new reserve system and PBS. PBS can work the west guys are happy with it. Said this is the right thing for AA and LCC, employees and the industry.


As far as representation goes it will be APA, the NMB is ready to move on that as soon as we get approval and there most likely won’t be a vote because it will be a “friendly” takeover from USAPA.


Dave went on to talk about how badly the AW-LCC seniority merger was done and said that this will be the opportunity to fix this for once and for all. It will fall under McCaskill-Bond which means it will be a 3 member board that decides if we can’t negotiate a deal and it will stick. There will be some kind of hard fence for wide body pilots.


Said the Boeing order will stand because they want the wide bodies for expansion, especially the 777-300’s.They also want to get out of the 50 seat jet business.


No change to sick.


What happens with Eagle is still to be decided.


There will be seat pay protection in case of displacements. Example 767 captain displaced to 737 will still get 767 pay.


After Dave left it was back to Q&A with Rusty and Russ and I asked Rusty about the seniority merge and the Nicolau award. Dave had basically said it was not a factor but Rusty wasn’t sure said the lawyers had differing opinions on it but said it should come out to where if you are at the 50 percentile point on your fleet your combined seniority number would put you at that place. Said that this along with seat pay protection might solve the Supp CC problem but if not then it would be decided by another 3 person panel.


Since LCC will be folded into AA and become part of oneworld the question came up as to what happens to oneworld since Horton is president and the answer was that we assume that since you have to be president of one of the member airlines to be president of oneworld Horton will be out of that job too.


The burden of proof is now going to be on Horton and the UCC is very wary of a labor war.


In the end this merger is going to happen no matter what but this gives us the chance to exercise leverage and do it on our terms as opposed to being ripped by Horton’s 1113 and then have Horton turn around and buy LCC after we emerge from Ch11 with Horton maintaining control.


Finally Dave, Rusty and Russ at some point all said this:


Everyone we talk to must understand that the entire pilot group is 100% in favor of this so we need to sell it to everyone we interact with. At the same time expect management to react in a hostile manner so don’t go off and end up as a hostage.


So there you have it. Hopefully I haven’t mangled anything too badly but I have to say that I am pleasantly impressed with what APA has done. We’ll see where it goes from here.

 

[Phoenix]

Applause for DP... He likes to solve things and make decisions, ya know. 🙄